1-Motive Power Company

1-Motive Power Company
Cregg Hart is manufacturing manager for Motive Power Company, a locomotive engine and rail car manufacturer. The company has been very successful in recent years, and in July 2006 signed two major contracts totaling nearly $200 million. A key to the company’s success has been its focus on quality. Customers from around the world have been very pleased with the attention to detail put forth by Motive Power.
One of the things Cregg has been adamant about is that Motive Power’s suppliers also provide high quality. As a result, when the company finds good suppliers, it stays with them and tries to establish a long-term relationship. However, Cregg must also factor in the costs of parts and materials and has instructed his purchasing staff to be on the lookout for “better deals.”
Recently, Sheryl Carleson, purchasing manager at Motive Power, identified a new rivet supplier in Europe that claims its rivets are as good or better quality than Motive Power’s current supplier’s but at a much lower cost. One key quality factor is the rivet diameter. When Sheryl approached Cregg about the possibility of going with the new supplier for rivets, he suggested they conduct a test to determine if there is any difference in the average diameter of the rivets from the two companies. Sheryl requested that the new company send 100 rivets, and she pulled a random sample of 100 rivets from her inventory of rivets from the original supplier. She then asked an intern to measure the diameters to three decimal places using a micrometer. The resulting data from both suppliers are given in the file called Motive Power.